KIND RED PACKET CIC

Executive Summary

Kind Red Packet CIC exhibits persistent negative working capital and net liabilities with limited operational scale and cash reserves. The company’s fragile financial position and lack of profitability undermine its ability to service debt obligations, resulting in a decline recommendation for credit. Close monitoring of liquidity and creditor levels is advised should the company’s financial position improve.

KIND RED PACKET CIC - Analysis Report

Company Number: 13478455

Analysis Date: 2025-07-20 12:32 UTC

1. Credit Opinion: DECLINE
   Kind Red Packet CIC shows persistent negative net current assets and net liabilities at £735 over the last two reported years (2023 and 2024). The company has very limited current assets (£10,102) primarily held in cash, which is slightly below current liabilities (£10,837). This weak liquidity position indicates an inability to comfortably cover short-term obligations. Additionally, the company is structured as a CIC limited by guarantee with no share capital, restricting capital injection options. The absence of profitability data and reliance on a single director with no reported remuneration or employees further signal limited operational scale and financial resilience. These factors collectively suggest inadequate capacity to service debt or absorb financial shocks, leading to a recommendation to decline credit facilities at this time.

2. Financial Strength
   The balance sheet shows negative net assets of £735 consistently over recent years, indicating accumulated losses or liabilities exceeding assets. The company holds no fixed assets and relies entirely on cash for current assets. Current liabilities slightly exceed current assets, resulting in negative working capital. The small scale of operations, reflected in the minimal asset base and single employee/director, implies limited financial buffer or collateral. The company’s status as a private company limited by guarantee with no share capital means equity injection is not straightforward. Overall, the financial position is fragile and lacks strength for credit absorption.

3. Cash Flow Assessment
   Cash on hand has decreased from £12,261 in 2023 to £10,102 in 2024, indicating a negative cash flow trend. Current liabilities remain high relative to cash, with accruals and other creditors constituting the majority. The negative net current assets position (-£735) signals working capital deficiency. The company’s narrow cash reserves and ongoing operational costs suggest limited liquidity and potential difficulties meeting short-term obligations without external support or revenue growth. The absence of detailed profit and loss data restricts deeper cash flow analysis but the trends point to constrained liquidity.

4. Monitoring Points

• Monitor cash balances closely to ensure liquidity does not deteriorate further.
• Watch for improvements in net current assets and movement towards positive working capital.
• Track any changes in creditors or accruals that could increase short-term liabilities.
• Review director and employee engagement to assess operational capacity.
• Observe any future capital injections or grants commensurate with CIC structure that might improve financial resilience.
• Monitor filing compliance and any changes in company status or control that may impact credit risk.